Hearing

Today, we will hear from multiple stakeholders on the potential economic and job creation impacts of the EPA’s new interpretation of their veto authority under the Clean Water Act. 

The Army Corps of Engineers has the lead responsibility for implementing the wetlands dredge and fill permitting program under Section 404 of the Clean Water Act.  Under the wetlands permitting program, the Corps is responsible for receiving and reviewing Section 404 permit applications and issuing wetlands permits.

Section 404 assigns EPA a limited review role in regard to Section 404 permits.  EPA may comment on Section 404 permit applications during an interagency review period for each permit, and EPA also has limited authority under Section 404(c) to prevent the Corps from issuing a permit to authorize a particular disposal site, or to restrict the terms of the permit, if EPA determines that the permit would result in certain unacceptable environmental effects.

Consistent with this process, in 2007, the Corps issued a Section 404 permit for the Spruce No. 1 Mine project in West Virginia.  Prior to the issuance of the permit, the project applicant conducted an extensive 10-year environmental review, in which EPA fully participated and agreed to all of the terms and conditions included in the authorized permit.  Subsequently, the mine operated pursuant to and in full compliance with the Section 404 authorization, and made substantial investments in the project, in reliance on the permit.

However, in 2009, EPA unilaterally changed the rules of the game after the fact, and took steps to revoke parts of the Spruce project’s issued permit even though they were in full compliance of the conditions of the permit. 

More than three years after the permit’s issuance, EPA finalized the permit revocation in early 2011, halting development of the mine, jeopardizing jobs and the substantial investments, and injected uncertainty into any industry impacted by section 404 permitting.

After the permit holder challenged EPA’s permit revocation action in the Federal courts, the U.S. Supreme Court has decided not to review a 2013 Appeals Court decision that EPA did not exceed its power when it stripped the Spruce Mine of its 404 permit.

Revoking a permit after it has been issued and when no violations of the permit have occurred is unsettling.  It is an arbitrary and irresponsible way for government to act.

The EPA has not only asserted itself after a permit has been issued, it has recently been preempting potential applicants.  A recent example of the EPA perhaps illegally exercising its veto authority before someone even applies for a 404 permit, is Pebble Mine, Bristol Bay Alaska.  In this case, without ever receiving an application describing a proposed action, the EPA has declared that no permit, regardless of conditions and potential public benefits, can ever be issued in the designated area.

I consider this regulatory overreach to be a fundamental property rights issue.  With this new and broad interpretation of its powers, EPA is setting itself up as the ultimate manager of land use and economic development in the Nation.  This is an example of government that thinks it has no limitations on its power.

The EPA’s newly expanded interpretation has the possibility of becoming a very dangerous precedent by opening the door for revoking not just 404 permits but perhaps other permits as well.  This new action by EPA will affect both public and private development and raises the question: What does it really mean to get a permit?  What does it mean to get a final decision from the federal government?  If an agency is given the right to unilaterally revoke an already-issued permit, then nothing can ever be considered “final.”

The issuance of a federal permit should come with certainty that the activity can go forward unencumbered but within the bounds of the permit, particularly those activities on private lands.  This no longer seems to be the case, and it is going to have a stifling effect on not just mining operations in Appalachia, but on economic development nationwide.

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